ADMINISTRATIVE REPORT

Date: March 20, 1998

Author/Local: Noel Peters/7328

Bruce Maitland/7420

CC File No. 5753

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services in consultation with the Manager of Real Estate Services
SUBJECT:	Proposed Closure of a Portion of the Lane South of Kingsway, East of Knight Street

RECOMMENDATION

THAT all that portion of the lane south of Kingsway shown hatched on the plan attached as Appendix "A" (the "Lane"), be closed, stopped-up, conveyed to the abutting owner and subdivided with the abutting lands to form the consolidated site (the "Consolidated Site") subject to the following conditions:

1.The Owner of the Consolidated Site (the "Owner") shall lease certain premises located in the Consolidated Site to the City for use as a library subject to the terms and conditions set out in Appendix "B".

2.The Owner shall provide in registrable form a Section 219 Covenant which shall be registered concurrently with the sale and transfer of the Lane which shall provide that the Owner shall not permit the use of any building or buildings on the Consolidated Site for any purpose whatsoever until such time as the lease and options to lease have been fully registered against the title to the Consolidated Site in priority to any charges, liens and encumbrances not in favour of the City, containing terms and conditions to the satisfaction of the Manager of Real Estate Services and the Director of Legal Services.

3.The Owner shall provide in registrable form a statutory right of way in the City’s favour and in the City’s form for the utilities existing in the Lane and for vehicular and pedestrian access purposes over the Lane together with an equitable charge, both of which shall be discharged by the City after the subject utilities have been removed from the Lane and both of which shall be registered against the Title to the Consolidated Site in priority to any charges, liens and encumbrances not in favour of the City.

4.Subject to first receiving the Approving Officer’s approval, the Owner shall provide in registrable form in the City’s favour and of the City’s form an option to purchase the Lane back for the amount of $210,786 excisable only after April 1, 2001 which shall be registered against the title to the Consolidated Site in priority to any charges, liens and encumbrances not in favour in the City.

5.If the City exercises the option to purchase referred to in Recommendation 4. above, and subject to first receiving City Council authority and the approval of the Approving Officer (if necessary) both at the time of the reconveyance, the City would reconvey to the Owner the new lane the City will be acquiring pursuant to the current proposed subdivision plan (a requirement of the reconveyance would be that it would need to be consolidated with those lands identified by the Owner, subject to receiving the City’s approval in accordance with its by-laws).

6.Prior to any excavation being conducted on the Lane, the Owner shall provide the City with a letter of credit in an amount to the satisfaction of the City’s General Manager of Engineering Services, which letter of credit could be drawn upon by the City if the City exercises its option to purchase Lane back as referred to in Recommendation 4. above and if the City needs to fill in any excavation and restore the Lane to the state that it was in prior to the closing date of the sale of the Lane.

7.The Owner shall pay the City the sum of $210,786 plus GST if applicable, for the Lane.

8.The Owner shall dedicate that portion of the Consolidated Site necessary to provide a lane outlet to King Edward Avenue suitable to meet the circulation needs of traffic expected to use this lane, to the satisfaction of the City Engineer.

9.The Owner shall be responsible for the cost of relocating existing utilities or providing rights- of-way to contain them, to the satisfaction of the City Engineer.

10.The Owner shall pay the City the additional cost expected to be incurred by routing the proposed sewer around the Consolidated Site, rather than through Lane. (The estimated cost for this additional sewer work is $261,000, if constructed in 1997.)

11.The Owner to be responsible for the cost of physically closing the Lane and constructing the new lane outlet, to the satisfaction of the City Engineer.

12.Proceeds from the sale of this Lane to be credited to the Streets Capital Property Purchase Account #14/33/0601/999 - Property Acquisition Transportation Corridor.

13.Such further and other terms as are satisfactory to the City Engineer, the Library Board, the Manager of Real Estate Services and the Director of Legal Services, it being noted that no legal obligations arise herein until execution of the documents.

COUNCIL POLICY

The authority for closing and disposing of streets and lanes is set out in the Vancouver Charter.

PURPOSE

An application has been received from the owner of the property on the east side of Knight Street from Kingsway to King Edward Avenue to purchase the portion of lane separating their holdings, see Appendix "A".

BACKGROUND

On August 12, 1996, the Development Permit Board approved in principle, the Preliminary Development Permit on the subject site. The proposal at that time involved three components. A retail/commercial building on the east side of Knight Street from Kingsway to King Edward Avenue, a three storey retail/commercial building on the lot to the east of the Toronto Dominion Bank and a residential building on the east side of the proposed lane outlet to King Edward Avenue. The Owner to that point in time had been unsuccessful in bringing the T.D. Bank site into the project and consequently, the Lane at the rear of the bank site could not be considered for closure.

Subsequent to the Development Permit Board meeting, the Owner concluded an arrangement with the Toronto Dominion Bank for their site. This will allow the amalgamation of the two building components on Kingsway and the closure of the Lane at the rear of the bank site.

DISCUSSION

Library

Considerable support has been received from the community to move the Kensington branch of the Vancouver Public Library to the premises of the proposed development. The closure of the Lane is important for the proposed development, and the new library location is important for the community. The requested Lane closure in return for the new library location would meet the needs of the Owner, and the objectives of the library and the community.

Lane

The requested lane closure has received the support of the Engineering Department because it offers an improvement to traffic flow along Knight Street, by eliminating the lane intersection and thereby reducing service vehicle conflict with buses. The lane traffic in the re-configured lane is consolidated to the east of the intersection at King Edward Avenue where there is less congestion. In addition, the subject Lane is not part of a continuous lane system. The provision of the new lane outlet to King Edward with its extra width of 24 feet and the provision of corner-cuts to ease the turning of traffic around the corner, will provide for existing lane traffic as well as traffic destined for the new development. There are a few utilities in the lane and compensation is sought, as set out below, for the additional costs the City will face by diverting the lane.

In addition to the normal requirement to have the Owner pay for relocation of existing utilities or provide rights-of-way to contain them, we are recommending that the developer be responsible for the additional costs the City will experience when a new sanitary sewer is constructed in the subject Lane. The area is currently served by combined sewers. It is planned that a new sanitary sewer will be constructed in the lane south of Kingsway and connect to an existing sewer on Knight Street near the intersection, with the lane south of Kingsway. The lane closure and site consolidation requested by the Owner will require that the new sewer be built now, around the Consolidated Site. The additional cost for going around the site is estimated to be $261,000.

In December of 1992, Streets Basic Capital was used for property acquisition of a portion of the development site fronting Knight Street for left-turn bay improvements. At that time, the subject development was not at a stage where a land exchange could be arranged. The City, using Engineering Capital accounts, therefore purchased a section of the subject site for the left-turn bay, and it is now appropriate to credit the sale proceeds to Engineering Capital accounts. We recommend that funds from the sale of this Lane be credited back to the Streets Capital Property Purchase Account #14/33/0601/999 - Property Acquisition Transportation Corridor.

CONCLUSION

This report recommends the sale of the lane to facilitate site consolidation and development. The recommendations also include requiring the developer to create and improve an alternate lane to service the development and adjacent existing uses. In addition, the developer will be providing library space on specific lease terms, as identified in Appendix B.

The land value of the lane will be paid by the developer, and he will be accepting responsibility for all the costs of relocating utilities and dealing with any soil contamination that may be in the lane.

If circumstances arise where the developer decides not to proceed with the development within certain time frames, then the City will have the option to purchase the lane back, as well as return to the owner the newly dedicated lane. This procedure would simply undo the deal on the lane and library lease space until an alternative development proposal comes forward.

Appendix A (Map) on file in the Office of the City Clerk.

Appendix "B"

a.The premises shall be located at the King Edward Avenue grade location in the development to be constructed by the Owner on the Consolidated Site (the "Development") immediately inside the mall entrance.

b.The Owner shall provide tenant improvements as proposed in the November 13, 1997 correspondence to the Library Board.

c.Subject to the provisions of Recommendations contained in Appendix "B" d. (ii), below , approximately 1,600 square feet of lease area with a gross rent of $21,000 per annum for a primary term of 10 years with two five-year options to renew at market rates.

d. (i)a first option to expand: available until December 1, 1999, to increase the lease area by approximately 2,400 square feet to a total of 4,000 square feet, the expanded area to be improved by the Owner with standard retail base finishes.

(ii)rent for the lease area at a triple-net lease rate of $15 per square foot, on the initial 1,600 square feet and the first additional 1,400 square feet, and market rent on the remaining 1,000 square feet, the term to run concurrently with the term of the original lease area and any renewal periods for the original lease area. Rent on the expanded lease area to exclude project-related, promotional, advertising and special event expenses.

e.(i)a second option to expand if the City does not exercise its first option to expand: available until January 31, 2003 to increase the lease area to a total area of 4,000 square feet, the Owner to provide the expanded area improved with standard retail base finishes.

(ii)the term shall commence on the date which is five years from the occupancy of the initial lease area (unless the Owner gives notice of earlier availability).

(iii)rent for the entire 4,000 square feet of lease area shall be the greater of a triple-net lease rate of $15 per square foot, or the then market rent, the terms to run concurrently with the term of the initial lease area and any renewal periods of the initial lease area. Rent on the expanded lease area to exclude project-related, promotional, advertising and special event expenses.

f.the Owner to register the lease and options to lease against the title to the Consolidated Parcel in priority to any charges, liens and encumbrance not in favour of the City. The City shall bear the cost of the registration of the lease and options to lease and the preparation of any necessary plans related to the lease and options.

g.the Owner shall not be obliged to comply with its obligations contained in recommendations contained in Appendix "B" a.-g., inclusive if by April 1, 2001.

(i)the Development is found to be not economically feasible and or financeable; and

(ii)the City does not approve the development of the Development, particularly as to density, number of levels, general height, and gross leasable/useable space, consistent with the concepts and specifications as outlined by Burrow Huggins Architects’ application presented to the Development Permit Board on December 1, 1997.

h.such further and other terms as are acceptable to the Manager of Real Estate Services, the Director of Legal Services and the Vancouver Public Library Board, it being noted that no legal obligations shall arise until execution of the documents.

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(c) 1998 City of Vancouver